Pareto Principle

“The Vital Few and Trivial

Many Rule”

“Predictable Imbalance”

“80:20 Rule”
Named after Vilfredo Pareto
-an Italian economist

•He observed in 1906 that

20% of the Italian
population owned 80% of
Italy's wealth

•He then noticed that 20%

of the pea pods in his
garden accounted for 80%
of his pea crop each year
The Pareto Principle
• A small number of causes is responsible for a large
percentage of the effect-
-usually a 20-percent to 80-percent ratio.

• This basic principle translates well into quality

problems - most quality problems result from a
small number of causes.

• You can apply this ratio to almost anything, from

the science of management to the physical world
Addressing the most troublesome 20% of the
problem will solve 80% of it.  

Within your process, 20% of the individuals will

cause 80% of your headaches.  

Of all the solutions you identify, about 20% are

likely to remain viable after adequate analysis.

80% of the work is usually done by 20% of the

people.
80% of the quality can be gotten in 20% of the
time -- perfection takes 5 times longer

20% of the defects cause 80% of the problems.

Project Managers know that 20% of the work

(the first 10% and the last 10%) consume 80%
of the time and resources.
A Pareto chart is a useful tool for graphically
depicting these and other relationships

It is a simple Histogram style graph that ranks

problems in order of magnitude to determine the
priorities for improvement activities

The goal is to target the largest potential

improvement area then move on to the next, then
next, and in so doing address the area of most
benefit first

The chart can help show you where allocating

time, human, and financial resources will yield
the best results.
While the rule is not an absolute, one
should use it as a guide and reference
point to ask whether or not you are truly
focusing on:

20% - The Vital Few

the or
80% - The Trivial Many

True progress results from a consistent

focus on the 20% most critical
objectives.
The simplicity of the Pareto concept
makes it prone to be underestimated
and overlooked as a key tool for
quality improvement.

Generally, individuals tend to think

they know the important problem areas
requiring attention……
if they really know, why do problem
areas still exist?
Although the idea is quite
simple, to gain a working
knowledge of the Pareto
Principle and its application, it
is necessary to understand the
following basic elements:
Pareto Analysis
Creating an tabular array of representative
sample data that ranks the parts to the whole
with the objective to use the facts to find the
highest concentration of quality improvement
potential in the fewest number of projects or
remedies
Thus achieving the highest return for the
investment.
Defect Press Press Press Press Total
22x28 38” 2-C 77” 5-C 77” 4-C Defects
Color 550 430 234 476 1690
Variation
Misregister 150 27 31 265 473

Hickeys 50 45 80 10 185

Scuffing 10 14 3 60 87

Excess Spray 16 21 30 5 72

Other 30 37 21 30 118

totals 806 574 399 846 2625

% Waste 30.70 21.87 15.20 32.23 100

Pareto Analysis of Printing Defects

Pareto Diagram
The Category Contribution, the causes of
whatever is being investigated, are listed
across the bottom, and a percentage is
assigned for each (Relative Frequency) to
total 100%. A vertical bar chart is
constructed, from left to right, in order of
magnitude, using the percentages for each
category.
Pareto Diagram is a combined bar
chart and line diagram based on
cumulative percentages.

80% improvement in quality or

performance can reasonably be expected
by eliminating 20% of the causes of
unacceptable quality or performance
Pareto Diagram of Total Printing Defects
100%

2500

90%

80%
2000

70%

60%
1500
Total defects

50%

40%
1000

30%

500 20%

10%

0 0%
Color variation

Misregister

Excess Spray
Hickeys

Other

Scuffing

Defect
 Press 77" 5-C
Press 22x28

0
50
100
150
200
250
300
350
100
200
300
400
500
600
700
800

0
Color variation
Color variation

Hickeys
Misregister

Misregister
Hickeys

Defect
Defect
Excess Spray
Other

Other
Excess Spray

Scuffing

Scuffing

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

Press 77" 4-C

Press 38' 2-C

0
100
200
300
400
500
600
700
800
100
200
300
400
500

Color variation
Color variation

Misregister
Hickeys

Scuffing
Other

Defect
Defect

Other
Misregister

Hickeys
Excess Spray

Excess Spray
Scuffing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0%

100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Relative Frequency
[(Category Contribution) / (Total of all
Categories)] x 100 expressed in bar chart
form.
Cumulative Frequency
[(Relative Frequency of Category
Contribution) + (Previous Cumulative
Frequency)] expressed as a line graph
Break Point
The percentage point on the line graph for
Cumulative Frequency at which there is a
significant decrease in the slope of the
plotted line
Vital Few
Category Contributions that appear to the left
of the Break Point account for the bulk of
the effect
Trivial Many
Category Contributions that appear to the
right of the Break Point, which account for
the least of the effect.
Pareto Diagram Analysis
• Pareto analysis provides the mechanism to
control and direct effort by fact, not by
emotion.
• It helps to clearly establish top priorities and to
identify both profitable and unprofitable
targets.
• In addition to selecting and defining key
quality improvement programs:
• Prioritize problems, goals, and objectives
• Identify root causes
• Select key customer relations and service programs
• Select key employee relations improvement programs
• Select and define key performance improvement
programs
• Address the Vital Few and the Trivial Many causes of
nonconformance
• Maximize research and product development time
• Verify operating procedures and manufacturing proce
• Product or services sales and distribution
• Allocate physical, financial and human resources
For a General Manager
The value of the Pareto Principle is that it
focuses efforts on the 20 percent that
matters.

Of the things you do during your day, only

20 percent really matter. Those 20 percent
produce 80 percent of your results.

Identify and focus on those things.

To Create a Pareto Chart:
 
Select the items (problems, issues, actions,
defects, etc.) to be compared.
 
Select a standard for measurement.
 
Gather necessary data

Arrange the items on the horizontal axis in a

descending order according to the
measurements you selected.
 
Draw a bar graph where the height is the
measurement you selected.